Business Concepts Flashcard

Front

What best describes the enterprise value of a company?

Back

The total value of a business, including debt and equity

Answer explanation

Enterprise value represents the total value of a business, encompassing both its debt and equity. This makes it a comprehensive measure of a company's worth, unlike the other options which focus on specific aspects.

Front

What are capital resources in the context of Michael's small bakery?

Back

The tools, equipment, and buildings used in production.

Answer explanation

In the context of a bakery, capital resources refer to the tools, equipment, and buildings used in production. These are essential for creating baked goods, distinguishing them from human effort, raw materials, or entrepreneurial ideas.

Front

What term refers to the wax and wicks Oliver uses to make handmade candles?

Back

Natural resources

Answer explanation

The wax and wicks used by Oliver to make candles are considered natural resources, as they are raw materials sourced from nature. This distinguishes them from capital resources, which refer to tools and equipment.

Front

Benjamin is deciding whether to spend his weekend working on a freelance project or going on a trip with friends. This decision involves:

Back

Giving up one thing in order to gain something else

Answer explanation

Benjamin's decision involves opportunity cost, as he must choose between working on a project or enjoying a trip with friends. This means giving up one option to gain the benefits of the other.

Front

David is trying to organize a community event but finds that there aren't enough resources to meet everyone's needs. What is this situation an example of?

Back

The inability to produce enough goods and services to meet all wants.

Answer explanation

David's situation illustrates the inability to produce enough goods and services to meet all wants, as he lacks the resources to satisfy everyone's needs for the community event.

Front

Mia has to choose between attending a concert or going to a movie with friends. What does the opportunity cost refer to in this scenario?

Back

The next best alternative given up when a choice is made

Answer explanation

The opportunity cost in this scenario refers to the concert, which is the next best alternative Mia gives up when she chooses to go to the movie with friends.

Front

Liam is running a small bakery. Which of the following represents the production costs for his bakery? The value of a finished cake, The profit earned by Liam's bakery, The total expenses required to produce cakes and pastries, The money paid by customers for a cake

Back

The total expenses required to produce cakes and pastries

Answer explanation

The total expenses required to produce cakes and pastries represent the production costs, as they encompass all costs incurred in making the products, unlike profit or sales value.

Front

What are labor resources?

Back

Human effort, skills, and abilities used in production

Answer explanation

Labor resources refer to the human effort, skills, and abilities used in production. This includes bakers and staff who contribute their expertise to create baked goods, distinguishing it from tools, raw materials, or entrepreneurs.

Front

Zoe is starting a new business and is learning about the essential components needed to produce goods and services. What are the four main factors of production she should focus on?

Back

Land, Labor, Capital, Entrepreneurial Resources

Answer explanation

Zoe should focus on Land, Labor, Capital, and Entrepreneurial Resources as the four main factors of production. These elements are essential for creating goods and services in her new business.

Front

Priya runs a small bakery and often finds she can't make every type of pastry she wants due to limited ingredients and time. Which economic principle explains why Priya must prioritize certain decisions?

Back

Scarcity

Answer explanation

The principle of scarcity explains Priya's need to prioritize decisions. Limited ingredients and time force her to choose which pastries to make, as she cannot produce everything she desires.